In Toronto Canada, the city garbage workers went on strike for an entire summer and tried to stop private clubs from taking away garbage for their members and entrepreneurs charging a flat rate. Our last mayor gave in and gave 17 paid leave sick days - can you imagine running a business and giving all your employees 17 sick days paid plus all the other benefits. Our garbage trucks are fitted with lifts for the bins as the workers are getting older so tax payers fund that too.
It is demoralizing for a business owner as we do not get that. Why bother being a small business owner? Work for a union or the government.
To the poster grumbling about the bankers, the Canadian public sector unions have the largest pool of privately held money that the invest in with these bankers. The private citizen does not have access to this investment pool. So who do you think it giving these bankers the money? In Canada it is the Teachers pension fund and the hospital workers pension fund and so forth. So the scam here is that public unions have the power and vote in union supporters.
We are going to see more Rob Fords - angry mayors. This is where the Sarah Palin's get their support from angry private citizens.

Notafan - You summed up the differences in worker attitude between private and public very well.
In Canada, our former PM Trudeau wanted the best people working in government. He never worked a real job as he has wealthy family subsidizing him.
A civil servant in Canada gets to retire within 25 years at 80% of top 5 years of salary with indexed pensions and full dental and health care benefits for life. Incredible. You would need to save $4M to cover the average public sector union retirement package.
Luckily our current government actually works hard to help business owners and is developing a business owner pension scheme.

I'm really suprised. I thought this magazine is liberal but it seem to be when talking of sacking people in privete sector, then it is because free market forces, but when it comes to firing a techear or civil servant market forces don't work. Is "The Economist" know how many workers have lost their jobs since the financial crisis bigun and how many in civil sector?

The economy is in tatters courtesy of the banksters. So let's separate investment banking and retail banks, right? Wrong! It's the fault of the public sector...
Yes the bureaucracy in the public sector is horrendously expensive and inefficient and by the way the EU is top of the list there. However should that detract from efforts at reforming the way the financial system works? I think not, yet there are no signs of progress there. Quite the contrary, fast trading is now running out of control, the volume of short trades on Forex is beyond belief. So let's not get the banksters off the hook by using every con-artists favourite trick: distraction.

The economy is in tatters courtesy of the banksters. So let's separate investment banking and retail banks, right? Wrong! It's the fault of the public sector...
Yes the bureaucracy in the public sector is horrendously expensive and inefficient and by the way the EU is top of the list there. However should that detract from efforts at reforming the way the financial system works? I think not, yet there are no signs of progress there. Quite the contrary, fast trading is now running out of control, the volume of short trades on Forex is beyond belief. So let's not get the banksters off the hook by using every con-artists favourite trick: distraction.

Returning public sector employment to something fair and affordable is surprisingly difficult. The teacher's unions for example portray every effort in this regard as an attack on children's education. Other unions similarly use media to attack governments while governments are reluctant to fight back by seeming to attack their employees. It is nearly impossible for governments to claim that public sector workers are inefficient, unproductive and over paid as although this is true, it is in part due to gutless and inefficient management.

The answer is simple. De-politicize the function by establishing the guiding principle that public sector pay and benefits must be referenced to private sector pay and benefits. An independent commission should be charged with performing the comparisons and recommending ranges and medians for various areas of employment compensation and working conditions. This would allow the politicians and negotiators to claim that their hands are tied and additional concessions would be unfair to taxpayers.

This operation would immediately reveal that government workers have been given many, many extra days off instead of over inflation raises to buy their ratification of agreements, even though their pay was already much higher than comparable private sector workers. Repealing these extra days off would immediately reveal that a complete hiring freeze is warranted in most public sectors. I am in Canada where this is certainly the case at the federal, provincial and municipal levels.

When pensions and disciplinary functions are established according to private sector standards we may begin to see some measure of responsibility cost effectiveness in the public sector.

Wherever possible, public sector functions should be taken over by private companies charged with administering services under a two part compensation which provides for penalties and rewards for efficiency and service excellence.

Finally, the government should become the employer of last resort. It is completely unfair that people are given jobs for life which are paid for by the great unwashed who struggle to find work or are driven to give up looking.

Public sector in rich welfare countries in Europe is the last relic of communism. Communism or socialism made a backdoor entry in Europe and USA during post war boom when Britain, France and Germany created public sector industry. Public servants also organized themselves on the model of Industrial workers. You could weaken industry labour unions but not those in Government service for running the country? With fickle elected Governments relying on coalition politics, bureaucracy becomes stronger and will be increasingly difficult to manage. The nearest simile is bankers - They will take their bonuses and annual raises. What happens to public at large is not their concern.
Some turmoil is inevitable. Hope it is not going to be bloddy.

People who support Public Sector Unions by saying things like, "Why don't people in the private sector demand the same thing?" are so clueless I can't believe they read this publication (maybe they saw a link on the Huffington Post?). In the real world, you can't DEMAND anything. You get paid what you're worth. In the government, you're paid whatever the politicians want to give you, which is a lot if you'll vote for them.

True story: a GS-12 in Washington D.C., a position you can get after only 3 years of post-undergraduate government experience, received $65,000 in 2007. It now pays $75,000 due to cost of living increases. The entire world economy melted down, but the government kept getting their raises.

To the people complaining that the private sector makes too much - if you really believe that, why don't you try going out there and EARNING some of that money yourself? That's how successful people think.

In a hundred lifetimes, all the lethargic DMV workers in all the world could not cause as much misery and cost the public as much money as a handful of Wall Street bankers have done in the last few years.

Over a hundred billion to AIG alone so that Goldman Sachs could collect - in full - their bets against the very mortgages they had securitized in the first place.

It takes a special kind of callousness to see this happen with no consequences for any of the culprits and then decide that the real problem is some cop's pension.

rdber - what would your reaction be if a union official were to say that they were "stocking up on brass and lead"?

It is difficult to fathom the economic ignorance rampant in this TE article as well as many of the readers' comments. The battle ahead is nothing less than the march of socialism towards self-destruction.

Let me ask the Economist to answer a simple question: how do you measure productivity in government?

Productivity makes sense when you are producing widgets at known costs and prices. Commercial services are harder, but with markets, they can be monetized. But government is a large and highly varied activity that is not priced in markets and does not just produce measurable outputs. So if productivity is to be used as the standard for government, then please explain how we are to assess it in a meaningful way.

The reason why public sector unions are needed, perhaps more than in the private sector, is that individuals may be persecuted without limit by the forces of the Leviathin, and there is no test of whether this is to the detriment of profits as in the private sector. Rational public servants recognise this risk and voluntarily join unions to provide protection as insurance.

In the west, where the pampered young have no responsiblity to anyone, older teachers are forced to retire, because students automaticatically judge their teachers by age, and complain bitterly about those with experience (and standards). So it is not supply driven early retirement, but demand.

You mention that is a problem in USA and Europe.
Well I am in Chile and we have exactly the same story. The center right President is trying to make state unions more productive and all it gets are ilegal strikes.
I think that union power in the public sector has to be limited and their pay check tied to productivity.
I have suggested to tie it to the economic performance of the country and the Public burocracy.
For instance tied to GDP growth per capita, Gini concentration of income (inversely) and the productivity of their department.
Every year this sorry show of Public Unions going to strike fot pay rise has to finish.If we do not act fast, it will be disaster before the end of this century as they will paraliza the production machinery.

sp6runderrated is correct in that the Economist barely masks its anti-union bias (although they make a commendable attempt)and that the decline in unionism in the US is not a natural occurrence.

It is implied in the article and by some comments here that public sector unions are more vibrant than their private sector counterparts because of some perceived political corruption. The truth is that the business world launched a full-on attack on unions some 30+ years ago and their success has produced the results described in the article.

The difference between public and private sector union rates has less to do with what the unions have done and more to do with the fact that private corporations can get away with much more (often illegal) anti-union activity. Sine the public employers (i.e. the government) have political accountability, they are less likely to use such blatant anti-union techniques that have become the norm in US business culture. The truth is that the overwhelming majority of Americans would like to build a union in their workplace, but the past 30 years of corporate malfeasance and destruction of labor protections has made that seem like a far fetched reality to most Americans.